Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Consumption is on the rebound as pandemic restrictions are lifted. Inflation has been higher than the 2% goal, but still not entrenched according to the BoJ. </li>
<li>JGB yields drifted lower despite higher consumer inflation. Lower producer prices may hint that supply issues are normalizing. Stocks are on fire</li>
<li>Bulls adding to Japanese semiconductor equipment names. Global backdrop of AI but Japan also benefits as a "safe haven" destination for new capital investments</li>
</ul>


Consumption is on the rebound as pandemic restrictions are lifted. Inflation has been higher than the 2% goal, but still not entrenched according to the BoJ. 
JGB yields drifted lower despite higher consumer inflation. Lower producer prices may hint that supply issues are normalizing. Stocks are on fire
Bulls adding to Japanese semiconductor equipment names. Global backdrop of AI but Japan also benefits as a "safe haven" destination for new capital investments


Japan Weekly | Nikkei +4.8% to 31 Year High, Advantest, Recruit, Makita

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> aims to raise up to US$2.4bn (JPY323bn) via a global offering.</li>
<li>The deal was undoubtedly accelerated by Reuters breaking the news of a possible equity raising on 15th May 2023.</li>
<li>We have covered most aspects of the deal in our previous note, in this note we talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering.
The deal was undoubtedly accelerated by Reuters breaking the news of a possible equity raising on 15th May 2023.
We have covered most aspects of the deal in our previous note, in this note we talk about the deal dynamics and run the deal through our ECM framework.


Rakuten US$2.4bn Placement - Larger than Rumored, Some Indications of Finality

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> is considering raising around US$2.2bn (JPY300bn), as per Reuters reports. The company hasn't confirmed or denied the same in its press release.</li>
<li>The company has been listing some of its subsidiaries and monetising investments to raise cash and has recently hinted at a possible equity issuance.</li>
<li>While there is no guarantee that the deal will ever materialize, in this note, we take an early look at the possible deal dynamics.</li>
</ul>



Rakuten (4755 JP) is considering raising around US$2.2bn (JPY300bn), as per Reuters reports. The company hasn't confirmed or denied the same in its press release.
The company has been listing some of its subsidiaries and monetising investments to raise cash and has recently hinted at a possible equity issuance.
While there is no guarantee that the deal will ever materialize, in this note, we take an early look at the possible deal dynamics.


Rakuten Possible US$2.2bn Placement - Will Be a Huge Deal to Digest, but It's Not All Bad

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> will report FQ4 results on 15th May. Consensus expectations are ¥844.4bn and ¥92.5bn in revenue and EBITDA respectively.</li>
<li>The company revised its previous guidance in February and expects revenues and OP of ¥823bn and ¥89.2bn respectively for 4QFY03/2023.</li>
<li>Our revenue forecast for 4QFY03/2023 is in line with Recruit’s guidance, while we expect the company’s adjusted EBITDA to be slightly higher than the guidance.</li>
</ul>



Recruit Holdings (6098 JP) will report FQ4 results on 15th May. Consensus expectations are ¥844.4bn and ¥92.5bn in revenue and EBITDA respectively.
The company revised its previous guidance in February and expects revenues and OP of ¥823bn and ¥89.2bn respectively for 4QFY03/2023.
Our revenue forecast for 4QFY03/2023 is in line with Recruit’s guidance, while we expect the company’s adjusted EBITDA to be slightly higher than the guidance.


Recruit Holdings: 4QFY2023 Earnings Preview

<ul>
<li>US job openings in February fell to 9.9m, lowest since May 2021 and 0.5m below market expectations. The job openings are forecast to drop further in March 2023.</li>
<li>
<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> 's 3QFY03/2023 profits declined significantly with labour markets returning to normalcy and we expect further drop in margins going forward.</li>
<li>HR Tech drives most of Recruit’s profits and we expect the company’s earnings to decline going forward with weakening of labour markets globally.</li>
</ul>


US job openings in February fell to 9.9m, lowest since May 2021 and 0.5m below market expectations. The job openings are forecast to drop further in March 2023.

Recruit Holdings (6098 JP) 's 3QFY03/2023 profits declined significantly with labour markets returning to normalcy and we expect further drop in margins going forward.
HR Tech drives most of Recruit’s profits and we expect the company’s earnings to decline going forward with weakening of labour markets globally.


Recruit: Further Drop in US Job Openings Adds Strain on HRTech Earnings

Japan

Recruit Holdings Co. Ltd. operates information providing services in human resource, housing, bridal, travel, restaurants, beauty, automobiles, and education and more. The company also operate staffing services and advertising business.

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Recruit Holdings (6098 JP)

Japan Weekly | Nikkei +4.8% to 31 Year High, Advantest, Recruit, Makita

The Nikkei 225 rose 4.8% and the Topix gained 3.1% on the week on signs of progress with the US debt ceiling, corporate updates, and foreign...

Mark Chadwick

Rakuten US$2.4bn Placement - Larger than Rumored, Some Indications of Finality

Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering. In this note, we talk about the deal structure and the deal dynamics.

Sumeet Singh

Rakuten Possible US$2.2bn Placement - Will Be a Huge Deal to Digest, but It's Not All Bad

Rakuten (4755 JP) is considering raising around US$2.2bn, as per Reuters reports. The company hasn't confirmed or denied the same in its press...

Sumeet Singh

Recruit Holdings: 4QFY2023 Earnings Preview

Our analysis and forecasts further affirm our view that Recruit's earnings growth is slowing down. US job openings have further dropped in March...

Shifara Samsudeen, FCMA, CGMA

Recruit: Further Drop in US Job Openings Adds Strain on HRTech Earnings

US job openings in February 2023 have fallen to the lowest level since May 2021 and is forecast to drop further in March 2023. We expect HRTech's...

Shifara Samsudeen, FCMA, CGMA

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